A warehouse is insured by Insurer A with a $400,000 limit and by Insurer B with a $600,000 limit. Both policies contain a standard pro-rata Other Insurance provision. A covered fire causes $200,000 in damage. How much does Insurer B pay?

Why this is the answer

Under the standard pro-rata Other Insurance provision, each insurer pays the loss in the proportion that its limit bears to the total of all applicable limits. Total limits = $400,000 + $600,000 = $1,000,000. Insurer B's share = $600,000 / $1,000,000 = 60%. B pays 60% × $200,000 = $120,000. Insurer A pays the remaining $80,000.